November 17, 2011 / 3:00 AM / 6 years ago

RPT-UPDATE 1-Freeport Indonesia union pay demand "excessive"-CEO

(Repeat of story published late on Wednesday)

* Says company committed to good faith talks with union

* Decries unrest, property damage in Grasberg strike (Adds New York dateline, Freeport CEO comments)

NEW YORK/JAKARTA, Nov 16 (Reuters) - Striking union workers at Freeport Indonesia’s giant Grasberg copper mine are sticking to pay demands for $7.50 an hour, a wage request deemed “excessive” by the U.S. miner’s chief executive.

In a question-and-answer session at Dahlman Rose & Co’s Second Annual Global Metals, Mining & Materials Conference in New York, Freeport-McMoRan Copper & Gold Inc’s chief executive, Richard Adkerson, said his company was firmly committed to working in good faith with the union but that the wage demands “have been excessive by an extraordinary amount.”

“We are proposing a very generous increase of 35 percent over two years, but they are asking for multiples of that,” Adkerson said. “It’s hard to understand where the numbers are coming from.”

Miners at Grasberg, the world’s second biggest copper mine, have been on strike since mid-September, leading Freeport to declare a force majeure on concentrate shipments last month.

The country’s new energy minister Jero Wacik told reporters in Bali on Wednesday that the two sides were closer to a pay deal, with the union having reduced its demand to $4.00 an hour and the company having raised its offer to $3.09 an hour.

Union official Virgo Solossa told Reuters that the union would reconsider if the company offered above $6.00 an hour, which would be up from current pay of around $2.00 an hour for workers.

Wacik said the government, which owns a minority stake in Freeport Indonesia, was trying to help achieve a deal and urged the firm to loosen its position to end the strike.

Adkerson confirmed that the union will extend its work stoppage through Dec. 15, adding that the social unrest and property damage resulting from the strike action was “really sad.”

“Everyone is losing. The Indonesian government is missing out on $8 million a day on royalties and taxes,” he said.

The strike has severely disrupted the company’s production. Freeport has also suffered sabotage to pipelines to its port and worker blockades on supply routes for fuel and food to the remote mountain mine in Papua.

Violence has escalated during the strike in a region seeing a long-running and low-level separatist insurgency, with unidentified gunmen on Wednesday shooting at both a security car on a Freeport mining road and a shipping container.

Adkerson also commented on the strike situation at Peru’s No. 3 copper mine Cerro Verde, where a six-week-old wage dispute has had an impact on production rates.

“This is a strike where we are coming together. The impact on production has not been significant and we are closing in on a resolution,” he said. (Reporting by Chris Kelly in New York and Rieka Rahadiana in JAKARTA and Olivia Rondonuwu in NUSA DUA; Writing by Neil Chatterjee; Editing by Ramthan Hussain and Jim Marshall)

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